US Steel tumbles as investors seek more from tariff windfall www.bloomberg.com

U.S. Steel Corp. fell the most among peers as a mixed bag of quarterly results left investors wondering if they would see any real benefit from trade policies that have pushed up U.S. prices of the metal.

Altansoyombo bag provided with renewable energy www.montsame.mn

Gobi-Altai /MONTSAME/ Operation of solar power station commenced under testing in Altansoyombo bag (smallest administration unit) in Tonkhil soum, Gobi-Altai aimag. Laying its foundation in 2017, Erchim Electrade LLC completed the construction work with investment of MNT 166 million.

Shiveekhuren-Ceke railway to be commissioned in 2019 www.gogo.mn

During its regular session on August 1, the Cabinet instructed relevant ministers to take measures concerning the construction of the 13 kilometer Shiveekhuren-Ceke port railway to be completed by the end of 2019. It was decided that structural construction of the port railway will begin in the third quarter of 2018.

The Central Bank of Mongolia expects to purchase 20% more gold in 2018 www.market-intel.mn

Key event: The Central Bank of Mongolia reported its gold purchases have reached to 8.3 tonnes, up by 14% y-o-y basis, and is further expecting that this year annual purchases will be 20% higher than that of the previous year.

Implications: As set by amendments to the 2014 Mineral Law, the stipulation that gold miners must pay royalties of 2.5% for selling to the central bank will expire on 01 January 2019. Whether it is further extended or not, the gold miners may need to sell their gold before the expiration date in order not to expose themselves to a higher royalty.

Outlook: This year Mongolia’s international reserves and foreign exchange rates are expected to be boosted by the significant gold purchase of the central bank. This is largely thanks to the increased production by gold miners and daily gold purchase rates of the Central Bank which are set to be in line with that of the London Metal Exchange.

It was reported that the Central Bank has delivered their recommendations to the draft revision of the taxation law, proposed by the Ministry of Finance, which includes a recommendation to extend the effective period for the royalty payment of 2.5% for the gold miners who sold their gold to the Central Bank or authorized commercial banks. The expiration date for the current rate is 01 January 2019 and this became effective on 24 January 2014 as per the amendments to the Mineral Law.

Due to the prolonged exchange rate volatility and the prevalence of gold smuggling in Mongolia, the government and the regulators have been subject to fierce criticism and political pressure for a number of years by the business community and the general public.

However, since the amendments to the Mineral Law in 2014, the gold purchase by the Central Bank continuously increased year by year which supported Mongolia’s international reserves and maintained foreign exchange rates until today.

Lately, the Central Bank has been taking various measures to increase gold purchases. Those measures include providing working capital to the gold miners through the “Gold-2” program, buying gold from local producers at the international rate, and running public campaigns such as “From local gold to the National Treasury” to educate stakeholders regarding the importance of selling gold to the central bank.

Additionally, it was reported that the Central Bank is aiming to set up approved gold verifying and buying centers (“Refineries”) locally which would be scattered around the country as branch offices of the Central Bank. It is understood that once those local refineries are established, the local miners will not need to come to Ulaanbaatar to refine and sell their gold. This would save a lot of time and money for the local gold miners and boost the Bank’s gold purchases.

Beyond this, the Mongolian Gold Producers Association is of the opinion that the government should revise its two-tier corporate taxation system if the country of USD 11 billion economy is to support its gold production and boost its international reserves. Currently, Mongolia has a corporate tax rate of 10% for business entities if their taxable income falls below MNT 3 billion, the marginal rate increases to 25% beyond this threshold. The Mongolian gold mining industry believes that the threshold is too low. As it is barely the equivalent of selling 30 kg of gold, the miners are likely to be forced to sell their gold to the Central Bank through individual miners, known as “ninja miners”, in order to reduce their tax burden.

If these regulatory hurdles are not resolved in favor of the gold miners they may face tough legal and market circumstances next year. This could gravely damage Mongolia’s gold industry and international reputation, just as was done by the Windfall Profit Tax Law and, The Law on the Prohibition of Exploration and Mining in Headwaters of Rivers, Protected Water Basins Zones and Forested Areas, also known as “Long Named Law”, in 2006 and 2009 respectively.

Armed Forces teams partaking in International Army Games www.montsame.mn

Ulaanbaatar /MONTSAME/ The International Army Games which annually organized by the Ministry of Defense of the Russian Federation kicked off on July 28 at Alabino military training ground in the Moscow region.

Baby from Mongolia to get life-saving surgery in Denver www.kdvr.com

DENVER -- This week a 10-month-old baby girl from Mongolia will get life-saving, open-heart surgery at Rocky Mountain Hospital for Children. It’s a surgery that is not available in her home country.

Alibaba, Starbucks team up for strategic partnership www.chinadaily.com.cn

China's e-commerce behemoth Alibaba Group Holding Ltd and global coffee giant Starbucks announced on Thursday a deep, strategic new retail partnership to transform the country's coffee industry.

Date of Irregular Session of Parliament not set www.zgm.mn

Head of Parliament Secretariat Tsolmon Tsedev informed that the Speaker expressed his support for summoning the Irregular Session during a meeting on July 30. A number of MPs confirmed to ZGM on Tuesday that the Secretariat contacted them to check their availability. It revealed that many of the MPs are on local and international assignments, therefore unable to participate in the irregular session, if summoned. According to the Law on Parliament, more than half of the members need to be available for the Parliament to convene. Currently, there are 75 members in the Parliament after Gantulga Dugar resigned. This makes the number of members that need to be available 38. Considering that 26 MPs signed a petition to summon the Irregular Session of Parliament, the Parliament’s Secretariat need only a dozen more members to summon the session.

Government convenes first time in 2 weeks to discuss flood relief actions www.zgm.mn

Government of Mongolia decided on Wednesday to release funds needed for restoring Ulgii soum, the center of Bayan-Ulgii province. 2500 people of 530 families have been hit by the flood. Three people have been injured, 287 houses have been destroyed and numerous houses, fences and gers have been drowned in water. Currently, the total toll is estimated at MNT 15.6 billion, and MNT 540 million is required to take necessary preliminary actions to help restore the soum. Government decided to provide MNT 468 million of the necessary funding from the Government’s Reserve Fund, and the remaining from the province and the soum’s reserve fund. Civil and international organizations, private entities and NGOs had also taken actions to help residents of Bayan-Ulgii province, the area heaviest hit by flood within the country. World Vision Mongolia, Mongolian Red Cross Assiciation, ADRA and Caritas collectively donated approximately USD 115,000 worth of products to help. The continued heavy rains all over the country has been a major hit to Mongolia’s infrastructure. A total of 116 km road in Arkhangai, Bayan-Ulgii, Bulgan, Gobi-Altai, Dornogobi, Zavkhan, Uvurkhangai, Sukhbaatar, Selenge, Tuv, Uvs, Khovd and Khuvsgul provinces was damaged. The Government decided to release MNT 1.3 billion funding for restoring the roads from the Government’s Reserve Fund.

Canada helps Russia build railroad to bypass Ukraine www.rt.com

Canada's aerospace and transportation giant Bombardier was one the contractors building a Russian railroad link that bypasses the war-torn territories of Ukraine, reports Globe and Mail.
The railroad stretch links the Voronezh and Rostov regions near the Ukrainian border and bypasses Ukraine’s Lugansk region. The construction of the rail link between the towns of Zhuravka and Millerovo began in 2014, after the deterioration of relations between Russia and Ukraine, and was completed last year. The railroad that was used before has 26 kilometers which pass through the war-torn Lugansk region in Ukraine. The new stretch is 137 kilometers.